Birla Estates Pvt. Ltd, part of BK Birla Group, has entered the Bengaluru property market with two projects, as the Mumbai-based firm forges ahead to create a pan-India portfolio mainly through the joint development route, with a focus on premium housing.
After launching its first residential project in suburban Mumbai’s Kalyan area, the developer is planning to launch its maiden project in Bengaluru’s popular IT corridor Whitefield.
Birla Estates has bought 7.8 acres in Whitefield from ESP, a limited liability partnership in land ownership, for ₹66 crore and plans to build 218 villaments priced between ₹1.2 crore and ₹2.5 crore. The project will be launched by end-September, said a top company executive.
A second residential project in Magadi Road, Bengaluru is currently at the design stage and is a joint development venture between Birla Estates and Subhadra Textiles. The six lakh sq ft project will be launched next year.
Birla Estates started operations as an independent company from January, and is a subsidiary of Century Textiles and Industries Ltd (CTIL). It has also developed a couple of commercial office spaces in Mumbai, as a real estate division of CTIL.
“As a company, we want to consolidate our operations in NCR (National Capital Region), Mumbai, Bengaluru and Pune. Investors are currently out of the market and end-users are driving sales. Consolidation at a massive scale has happened after several shocks that the sector faced. But it’s an opportune time for serious corporate developers like us, with a long-term view," said K. T. Jithendran, CEO, Birla Estates.
The Whitefield land was bought by the company at an attractive valuation, Jithendran said.
“...But, we are largely following an asset light model and being very choosy about who we are partnering with," he added.
Corporate real estate developers, many of them new entrants, have embarked upon expansion plans to take advantage of the changing regulatory environment amid rising distressed assets in the property market. Large corporate houses clearly see an opportunity in the stressed realty market and are out to acquire land and explore development opportunities.
In its Kalyan project, Birla Vanya, where apartments are priced between ₹43 lakh and ₹1.2 crore, was launched in April. It has sold over 400 of the 530 units in Phase-I within three days of its launch.
Real estate firms like Birla Estates are also selectively expanding into different property markets during a time when most developers are sticking to their core geographies, and curtailing multi-city operations.
Earlier this year, Birla Estates entered into a joint development agreement with Anant Raj Group for a 75-acre housing project in Gold Course Extension, Gurugram where it had committed ₹400 crore.
“Even as the market is drawn towards the affordable segment now, our strategy is to
focus on premium housing, to establish the brand, execute well and give customers excellent quality. It’s tough to get a good, fully compliant contractor if we operate in the affordable segment and cost of funding and approvals are an issue," Jithendran said.
The firm’s ambitious project is its prime 30-acre land parcel in Worli, south Mumbai where the former Century Mills was located. It plans to do a mixed-use project there, including high-end housing, office space and retail. The project is currently awaiting development control regulations on mill land.